Annual report 2014

Note 4. Net Exceptional Items

Financial Report | Statutory Auditors’ Report on the Consolidated Financial Statements | Consolidated

Financial Statements | Statutory Auditors’ Report on the Financial Statements |

Statutory Financial Statements

The decrease in the net financing costs from -€172.2 million in 2013 to

-€53.8 million in 2014 is due to:

the decrease in external financing net costs from -€454.6 million

in 2013 to -€249.3 million in 2014, primarily as a result of the shift

of external net debt of €10.9 billion as of December 31, 2013 to

a net cash position of €4.6 billion as of December 31, 2014, i.e. a

€15.5 billion increase, mainly reflecting the impact of the sales of SFR

and of the Group’s stake in Maroc Telecom group (see “Significant

Events”, the Statement of Cash-Flow, Note 7, Financial Investments,

and Note 17, Borrowings). The average external net debt was

€7.8 billion in 2014 compared to €14.6 billion in 2013; and conversely;

the decrease in internal net financing income (see Note 8, Current

Assets) from €282.4 million in 2013 to €195.6 million in 2014, as a

result of (i) the partial reimbursement from SFR, on May 14, 2014, of

its current account in the amount of €4 billion following the sale of

Maroc Telecom (directly held at 51% by SFR), and (ii) the disposal of

the balances of SFR’s loan and current account to Numericable, on

November 27, 2014.

3.2. Dividends received

Income from affiliates includes dividends from the interest in Activision

Blizzard of €11.4 million compared to €3,545.5 million in 2013 (including

a dividend of €2,562.5 million received from Vivendi Holding I LLC

in the form of Activision Blizzard shares and from SFR of €981.9 million).

3.3. Financial provisions and impairments

The changes to financial provisions and impairments resulted in a net

charge of €255.2 million including €136.8 million provision on current

accounts with affiliates, and a €121.8 million impairment on long-term

investments in affiliates.

During the fourth quarter of 2014, Vivendi, with the assistance of

independent appraisers, examined the value in use of its equity holdings,

including Groupe Canal+ and two holding companies from the music

sector held by Vivendi, being (i) Universal Music Group Inc. (UMG Inc.) in

relation to its activities in North America and Mexico and (ii) SIG 104 in

relation to activities in other countries. The value in use of Studiocanal

and nc+ in Poland was examined internally.

As a result, Vivendi’s Management determined that the value in use

of Groupe Canal+ SA, as of December 31, 2014, was equal to its net

carrying value. It also determined that the value in use of the two holding

companies from the music sector held by Vivendi, UMG Inc and SIG 104,

was determined to be higher than their respective book values.

The impairment of €121.8 million recorded as of December 31, 2014,

relates to Vivendi’s Snege shares and Wengo shares.

Note 4.

Net Exceptional Items

In 2014, a net exceptional gain of €3,290.7 million was recorded,

compared to a net exceptional loss of -€2,749.2 million in 2013. It is

primarily comprised of the following items:

a global income of €4,029.5 million realized on the sale and

contribution of the shares of SFR to Numericable (see “Significant

Events”) comprising (i) a loss of €6,963.5 million on the sale and share

contribution, (ii) a reversal of impairment of €11,193.0 million taken

on the SFR shares, and (iii) an exceptional charge of €200 million

relating to Vivendi’s participation in the financing of the acquisition

of Virgin Mobile pursuant to the agreement entered into on June 20,

2014;

a net capital gain of €206.2 million related to the sale of 41.5 million

shares of Activision Blizzard, following the expiration of the first lock-

up period as agreed at the time of the sale of more than 85% of the

Activision Blizzard interest in October 2013;

a net charge of €103.0 million, after reversal of impairment, related

to the sale of SPT and Maroc Telecom shares directly held by Vivendi

(see, “Significant Events”); and

a net charge of €624.4 million related to (i) the premium paid in

connection with the early redemption in December 2014 of bonds

issued in euros and USD with a make‑whole option for €4,250 million

and $594.8 million, respectively, and (ii) the balancing payment

received on hedging swaps (see Note 17, Borrowings).

3.1. Financing costs

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Annual Report 2014